Atlanta lawyers Brian Casey and Tom Sherman and San Francisco lawyer Jaremi Chilton co-authored an article examining changes to the taxation of carried interests under the Tax Cuts and Jobs Act (TCJA) and the effect on life settlement investment funds. The authors identify that “the TCJA’s new rule requiring a three-year holding period for long-term capital gain taxation of a carried profits interest may, depending on the facts, not apply to an investment manager’s carried interest in a life settlements investment fund. However, it is not clear how such a carried profits interests will be taxed where the fund holds a de minimis amount of cash reserve specified assets, which is a matter for which Internal Revenue Service guidance is needed.”
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